Wednesday, 13 July 2016

European Stocks Climb for a Fifth Day to Trim Post-Brexit Drop

A fifth straight gain pushed European stocks closer to erasing losses incurred since the Brexit vote.

Investors are turning their focus to earnings reports, with Burberry Group Plc up 7.8 percent after posting first-quarter retail sales that beat analysts’ estimates. Mining shares also boosted the Stoxx Europe 600 Index, with Antofagasta Plc and ArcelorMittal up 3 percent or more.

Europe’s equity benchmark added 0.4 percent to 337.61 at 1:16 p.m. in London, coming within 10 points of erasing its losses since Britons voted to leave the European Union. While the benchmark gained 5.5 percent in the past four sessions, its recovery has been slower than that of global shares, which wiped out their post-Brexit declines Tuesday.

“There is still a lot of uncertainty about what’s going to happen with Brexit and how fast the talks will unfold. But at the moment, it really seems we are not as worried as we were last week,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “Earnings will be very important, to show that the economy is still alive and to convince investors there are still some opportunities in European companies out there.”

Equities are rebounding after sliding last week on concern over the strength of the Italian banking system and the impact of the U.K. referendum. Speculation of looser monetary policy to contain the fallout of Brexit have boosted shares since then, while uncertainty about Britain’s leadership has also eased, with Theresa May taking over as prime minister today.

Some shares moved on deal activity today. Accor SA added 4.4 percent after announcing plans to separate its HotelInvest unit and eventually sell a majority stake in the subsidiary to free up funds for the parent company to expand and improve existing lodgings. Playtech Plc rose 4.2 percent after saying it bought Vienna-based Best Gaming Technology GmbH for 138 million euros ($153 million).